Elliott wave analysis of EUR/JPY for September 4, 2015

Technical summary:

A break below 133.27 confirmed that correction from 141.06 is still unfolding and should move lower to 131.63 as the next downside target. The short-term former support at 133.27 will act as resistance now , but even in case of a breakout the back-up resistance will be found at 133.67, which is expected to protect the upside.

But what if support at 131.63 gives away too? Looking at the price-action since May we have a clear S/H/S top in place (see the chart below). Yesterday's break below 133.27 points to a break below the S/H/S neckline and the measured downside target for this formation is below a mid-April low of 126.05. If this low is broken, the rally to 141.06 would be assumed to be an X-wave and a much larger correction is unfolding.